Want to understand why GameStop (NYSE:GME) shares are rocketing higher? Consider taking a trip to subreddit r/WallStreetBets. There, you will find Reddit users touting $11 million in paper profits. You will also find a great deal of the reason for the rise in GME stock. With the power of the social media platform in mind, what Reddit WSB stocks will be next? Here are five names that could be the next GameStop.
Sure, Reddit is not the sole reason for the rise in GameStop. Shares have been on the move for several months as a potential turnaround story starts to play out. Essentially, many investors had accepted that the brick-and-mortar video game retailer was doomed. Then, Chewy (NYSE:CHWY) founder Ryan Cohen stepped in. Cohen announced that GameStop to take on Amazon (NASDAQ:AMZN) through beefing up its e-commerce framework. For r/WallStreetBets, the stars started to align.
Crowds of retail investors followed, as did a powerful short squeeze and the ire of Citron Research. Nothing so far has been enough to derail GME stock, which is up 14% today.
What can we learn from GameStop? Speculators are already betting that GameStop is paving the way for similar gains in other stocks. Here are five of those names — how you proceed is up to you.
Reddit WSB Stocks: BlackBerry (BB)
Although BlackBerry is familiar to many for its cell phone line, the company switched its focus back in 2016 and sold off many of its handset assets. Now it focuses on cybersecurity, artificial intelligence and internet of things (IOT) solutions. As InvestorPlace Markets Analyst Tom Yeung wrote, BlackBerry has found quiet success through these solutions. Its end-to-end cybersecurity tools secure 175 million cars, and its QNX operating system helps run driver assistance and infotainment for eight top automakers.
However, the new focus has not been smooth sailing for BlackBerry. As Yeung also highlights, revenues have plummeted 95% since its 2011 peak. BB stock has followed those revenues, touching a 52-week low below $3. Armed with new high-tech solutions, could a turnaround story be underway?
It sure seems like it, at least according to Reddit. BlackBerry recently sold off more of its patents to Huawei, further distancing itself from the handset business. It also settled a suit with Facebook (NASDAQ:FB) over its messaging technology. With those two accomplishments and a massive rally in the rear-view mirror, Yeung is betting that more gains are on the way.
Is Express (NYSE:EXPR) the next GameStop? Some r/WallStreetBets posters think so, setting EXPR stock up to be another potential Reddit winner.
Express, like GameStop, is a staple of the dying brick-and-mortar retail era. You can find Express stores in many malls where foot traffic and sales are down, especially thanks to Covid-19. Plus, as Wedbush analyst Jennifer Redding highlighted, current apparel trends are not helping the retailer. Express focuses on dressier clothes in an age where athleisure is winning. The company burned more than $134 million in nine months as these trends started to play out.
That is not stopping investors from seeing it as one of the Reddit WSB stocks to chase.
Shares closed higher Monday by more than 100% in a truly wild move. Although they are down nearly 25% today, the gains in EXPR stock are still impressive in a short time period. This is where the turnaround angle comes in.
According to Will Meade, who identifies himself as a former portfolio manager at Goldman Sachs, Express is identical to GameStop before its big run. Beyond identifying it as a potential turnaround story in retail, he also cites recent investments. Express has recently received financing from Sycamore Partners and Wells Fargo (NYSE:WFC). With $140 million more to its name, EXPR stock apparently looks like the perfect fit.
Reddit WSB Stocks: AMC Entertainment (AMC)
Struggling movie theater operator AMC Entertainment (NYSE:AMC) is also gaining thanks to Meade and speculative hopes. Yesterday, Meade identified AMC stock as one of the “short names” for the r/WallStreetBets “army” to go after next. This is because at the time, AMC had a share price below $10. It also had a short interest of 35%.
The story with AMC Entertainment should be rather simple. Movie theaters are struggling thanks to the Covid-19 pandemic. Film releases face delays. No one wants to crowd into a theater and risk getting sick. Non-essential business closures physically kept theater doors shut for several months. Now, movies are slowly starting to trickle out of Hollywood. However, with talk of straight-to-streaming releases, there are still concerns for AMC Entertainment and its peers.
AMC shares got another boost of hope yesterday. CEO Adam Aron said that restructuring is now off the table, as the movie theater operator has successfully avoided bankruptcy. This comes after raising $411 million of extra debt financing and $506 million in stock and bond sales.
Avoiding bankruptcy is a big step in a turnaround story, but the future will still be rough. If you are bullish on AMC stock and other Reddit WSB stocks, be sure to keep doing your own research.
Nokia (NYSE:NOK) and some of its other old-school tech peers are inspiring rocket ship emojis on r/WallStreetBets. As Bloomberg Quint writes, Nokia is yet another name investors are diving into on momentum and not company fundamentals.
However, the company fundamentals here may actually work out in favor of Nokia and the Reddit stocks community. As Swedish SEB analysts commented yesterday, Nokia may actually be undervalued in comparison to its peer Ericsson (NASDAQ:ERIC). Additionally, analysts think its fourth-quarter report will come without drama. Due out Feb. 4, the report could be a sign that Nokia is continuing its 5G growth trajectory. Heck, SEB thinks Nokia could even reinstate its dividend.
Nokia may not be the sexiest name, but thanks to Reddit stocks, that all could be changing soon. Make sure to keep NOK on your radar.
Reddit WSB Stocks: Koss Corporation (KOSS)
Koss (NASDAQ:KOSS) is a legacy audio equipment maker known for high-quality headphones and speakers. However, KOSS stock is not exactly a ticker that regularly captivates investor attention. That is, until yesterday. Meade shared that like AMC, KOSS stock was looking like it could be the next GameStop. That suggestion sent shares up 80% yesterday and another 50% this morning.
As InvestorPlace contributor Robert Lakin wrote this morning, KOSS stock has been cheap, only occasionally gaining. Those gains come from the Covid-19 pandemic. Essentially, some investors realize that people staying at home want to enjoy their music and podcasts. What better way to do that than with nice headphones?
However, Lakin is not convinced that it is time to dive into KOSS stock. He wrote that for a good investment, a pair of Koss headphones is a way better bet. Whether or not you agree, Koss Corporation is a name to keep on your radar now.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.